SUNY Adopts Credit Card Reform Agreement

Ah, the emergencies only credit card. Sounds great in theory but when a student’s cash flow is low, the term “emergency” can take on an entirely new meaning (some sweet new sneakers or a floor dinner at Chez Fancypants, perhaps?). If Mom and Dad aren’t too keen on the idea – maybe they’ve been there, done that and have the credit score to prove it – there hasn’t been much they could do to prevent their child from stopping by the student union during the first week of classes and signing up for myriad cards and repercussions…until Andrew Cuomo stepped into their corner.

Reuters recently posted an article detailing the State University of New York’s agreement with the New York Attorney General to adopt practices to protect students from unnecessary debt. SUNY, with 465,000 students on 64 campuses throughout the state, is the first university in the country to adopt this sort of reform, which calls for mandatory financial literacy programs to educate students on loans, credit cards and finances in general to minimize the nearly $4,100 in credit card debt and $20,000 in loans that most four-year college students graduate with. Letters have also been sent to the state’s approximately 300 higher educational facilities insisting that they evaluate any existing contracts with credit and debit card companies, prohibit the sharing of students’ personal information with card companies without authorization, limit on-campus marketing and never accept percentages of charges imposed on students.

When I began my freshman year at UConn in 2001, I made the decision not to sign up for a credit card for one simple reason: I knew that when I tired of my wardrobe or dining hall food, it would have been all too easy to bust out the plastic. That being said, I knew plenty of people who were tempted by the free t-shirts and bottle openers and they would have surely benefited from Cuomo’s reform and tips like these. Now to our readers: Have any financial wins or woes from your college days you'd care to share? Would you have made different choices if more information was available? Were the sneakers worth it?

In April, right up until enrollment deadlines, students were still considering “too expensive” schools and were willing to stretch to pay for their education, poll conductors the College Board and the Art & Science Group report. While it would be more financially sound to select the school with the lower tuition and better financial aid package, “too expensive” colleges remained in play if they had strong academics in students’ fields of interest, were places students felt comfortable, had prestigious academic reputations or had excellent records of graduate school acceptance or good job placement after students graduated. Here’s the breakdown:

Twenty-six percent of students surveyed said their family would have to stretch a lot, but “I think we’ll make it.”

Twenty-two percent chose “I’m not sure how my family will afford to send me to college, but I believe we’ll work something out when the time comes.”

Eleven percent said, “I don’t think my family can afford to send me to college, but we are going to try.” Nearly 40 percent of students surveyed did not have a sense of long-term costs, citing “no idea” what their likely monthly payment on student loans would be after graduation.

If you think back to every award show you’ve ever seen, you’ll recall those who do not win always say it is an honor just to be nominated. The same can be said for college admissions: It’s an amazing achievement to be accepted to a prestigious college but is attending worth it if the cost of attendance is going to drive you and your family into debt?

Kiplinger Ranks Top Private and Liberal Arts Schools

True or false: Public schools are always a better value than private schools or liberal arts schools. Have your answer all bubbled in? Let’s see if it’s right.

A school’s value isn’t solely determined by cost; though it does play a significant role, if you factor in curriculum caliber and overall quality of life, it turns out that many private and liberal arts schools are indeed better values than their public counterparts. That and the amount families actually have to pay after financial aid is only around $20,000. Nice.

According to Kiplinger’s annual lists, Swarthmore College and Princeton University lead the pack for liberal arts and private institutions, respectively. Why? Swarthmore’s most qualified applicants only pay $18,791 – that’s nearly two-thirds off the school’s $52,650 sticker price and a huge reason why almost all Swatties return for sophomore year – and Princeton graduates leave its hallowed halls with the lowest average debt, due in large part to a tuition bill less than $50,000 and the elimination of student loans from its financial aid package. Here are the top 10 in each category:

Interest in the Once Most Popular Major Stalling, Falling

One would think that the condition of the U.S. economy would have undergraduates declaring business as their majors in droves. One would also, however, be wrong: Federal and college data show interest in the field is mimicking the Metrodome roof and falling.

Inside Higher Ed reports business is no longer the big man on campus in terms of majors and interest appears to be static and even waning at many schools. Since 2008, Pennsylvania State University has recorded a 30-percent decline in undergraduates accepting offers from its Smeal College of Business – a trend that’s far from isolated: Though rates have remained stable and even increased at the University of Oregon and Indiana University, the share of business majors at University of Central Florida is down by nearly 15 percent this semester relative to 2008 and 13 percent fewer students are enrolled in Purdue University’s Krannert School of Management this semester compared to two years ago; last year, the number of applicants dropped 26 percent from the previous year.

John Pryor, director of the survey-conducting Cooperative Institutional Research Program at the University of California Los Angeles, suggested student loan debt and the perceived lack of career stability in business may be fueling this shift. "Even though students have higher debt, some are seeing that business is not as likely to help them pay that debt back," he wrote. "We also saw business employees losing jobs and having lower incomes, so perhaps students see business as not providing as sure a track towards economic freedom as in the past." The survey also suggested undergraduate interest in business peaked long ago – 1987 to be precise, the same year Gordon Gekko famously declared "greed, for lack of a better word, is good” in the movie “Wall Street.” Coincidence?

Students, has the economy influenced what you’re majoring in? Are you more likely to take pages from the books of computer science majors Bill Gates and Mark Zuckerberg instead of emulating good ol’ Mr. Gekko?

Wait...WHAT?! Exactly...but that's what happened at Arizona State University when former baseball coach Pat Murphy requested a number of his players relinquish all or part of their athletic scholarships for the 2006-2007 academic year so that the coaching staff could enroll several transfer students they had been recruiting through a program Murphy called Devil-to-Devil. His actions may not have been discovered unless a parent of a player complained about the process to ASU’s athletics director and after an investigation, the National Collegiate Athletic Association (NCAA) agreed that this practice was problematic and violated rules. The punishment: ASU has been banned from the college playoffs this coming season and must vacate numerous wins, including the team’s 2007 Pacific-10 Conference title and trip to the College World Series; the school also received three years' probation, scholarship reductions and recruiting limitations. Though ASU has taken responsibility for not monitoring the baseball program more closely, it intends to appeal the NCAA’s decision.

As for Murphy – who echoes the name of his program with several other questionable practices – he’s not coaching anywhere at the moment but will not go unpunished. He was forced to resign last year and the NCAA bestowed a one-year show-cause penalty upon him so that any institution interested in hiring him in the next 12 months must not only defend why it is hiring him but also how it will monitor his behavior to prevent further violations.

This situation is shady any way you slice it but I do feel for the ASU students and coaches who are being penalized for events they had no part in. The beauty of college scholarships is that they don’t have to be repaid, allowing students to graduate with little to no student loan or credit card debt. To be clear, what Murphy did was wrong but by limiting the amount of scholarship awards and financial aid ASU can disperse, he’s not the one being truly punished – it’s the deserving students that are being hurt the most.

Changes in Higher Ed Funding Afoot

While "Honest Barack" doesn't have quite the same ring as our 16th President’s nickname, we have to give him credit for keeping his promise to privilege spending on education and research...for the most part: Some potentially painful cuts could slice through the higher education pie relatively soon.

First, the good news. The 2012 budget blueprint reveals the maximum Pell Grant (currently set at $5,550 per year) would not be slashed by $845 as originally expected and funding will continue for financial aid programs including AmeriCorps, the Perkins Loan and Supplemental Educational Opportunity Grant Programs and academic research agencies. The Education Department's overall budget would grow by 4.3 percent in 2012 under the President's budget but despite this positive information, it won’t be all unicorns and butterflies for college students. Education Secretary Arne Duncan said the administration had to make some "tough choices" to maintain the current level of funding and compensate for future spending. For example, the department's 2012 budget calls for ending a three-year experiment allowing students to qualify for two Pell Grants in a calendar year and use this funding to attend college year-round, as well as eliminating the subsidy in which the government pays interest on graduate student loans while the students are in school; the Leveraging Educational Assistance Partnership Program, the Byrd Honors Scholarships and the TEACH Grant program would also be eliminated.

Obama said, "Education is an investment that we need to win the future...and to make sure that we can afford these investments, we’re going to have to get serious about cutting back on those things that would be nice to have but we can do without," but student advocates, like Justin Draeger, president of the National Association of Student Financial Aid Administrators, were quick to show their displeasure. "It is regrettable that the administration is proposing to maintain Pell by making cuts to other student aid programs that provide much needed funds to students," he said.

The information above merely scratches the surface (check out Inside Higher Ed’s article for all details) but it’s enough to get the conversation started. What do you think of the proposed budget? Will the changes impact your ability to pay for school? Would you propose a different course of action?

Applying for scholarships requires hard work, creativity and time...not boatloads of cash, frustration and empty promises. Each year, however, students are duped into ponying up exorbitant application fees for scholarships they aren’t even guaranteed to win. This is just plain WRONG, people – scholarships are supposed to be free money for college! – and while we’re betting you’ve already checked out our pages on scholarship scam prevention, the Washington Post recently published some refresher info:

Filling out the FAFSA is 100-percent free and you can do it either online or on paper. If you would like to fill it out online, be sure your search terms are correct: A seemingly small typo like "FASFA" can direct you to sites that ask you to pay to file...and the forms they have are sometimes the wrong ones.

It's legal for for-profit companies to charge for providing scholarship information but it's illegal for them to collect fees but never provide the information, misrepresent themselves as government officials or guarantee they'll get the student full funding for college.

Voice any concerns about an organization to a high school or college counselor; they've been there and done that and can point you to the truth.

If you are alerted that you're a finalist for a contest you've never entered or if credit card/banking information is requested online, go no further unless you are positive the organization is legit.

Don't give in to anything branded as a "limited time offer" or "exclusive opportunity." They're just high-pressure sales tactics.

Investigate the success stories presented at seminars. These so-called "satisfied customers" could have been paid to give glowing recommendations so ask for a list of at least three local families who used the service and contact them directly to make sure the organization delivered on its promises.

If you do find a legitimate organization that requires payment, get in writing how much the service costs, what exactly the company will do and the refund policy.

Desperate to pay off their children's $20,000 worth of student loans, a Boston-area parent recently posted on Craigslist that he or she was willing to sell their body parts to combat the mounting debt. The posting did not include a name, gender or exact location but listed the "live cadaver" was 5 feet 10 inches tall, 200 pounds and had all organs in working order. "If you eliminate my children's student loans, I will give you my life!" the poster wrote. "Take my blood, take my plasma. Drill into my brain, my leg, my arm. Tap my heart, my liver, my kidney," the poster wrote, adding, "I am very very serious."

Will it happen? Our Magic 8-Ball says "cannot predict now" but we hope it goes through for the sake of the many students in need. How are you currently paying for or planning to pay for school? What programs have you found most helpful in securing the funding you need?